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Kelly Holmquist

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Be Careful Of This Blast From The Past

01-17-12
Kelly Holmquist

Be Careful Of This Blast From The Past

Lately, The Holmquist Team members have been noticing some advertisements for mortgages that make us feel like we’re back in the early 2000s. I’m referring to the so-called hybrid loans that promise a very low fixed mortgage rate for a few years, and then become an adjustable-rate mortgage.

Be careful. Don’t let a mortgage calculator lull you into a mistake.

If you’re considering buying a home, an adjustable mortgage might work for you or you may be better off with a fixed-rate mortgage, especially with rates as low as they are. The trap, for many people, is their credit score and the belief that they can buy cheap now and refinance or sell before the mortgage balloons. A Holmquist Team Realtor can help you avoid the trap.

Your house-hunt should begin at your dining room table with some planning and it shouldn’t be impacted be promises of extra-low interest rates. As in everything else, if it sounds too good to be true, it probably is.

There really hasn’t been a better time in a generation to buy a home if you can afford it. I know: Realtors say that all the time. But, with interest rates low and a good selection of homes, it’s very true. If you’re thinking about it, here’s how to plan it:

  • Start by looking at your financial situation, including your credit. Lending standards are high, these days. Get copies of your credit scores from the three reporting bureaus and make sure there are no errors or issues. Look at your own financial situation. How secure is your income? What can you afford? A financial planner or a Realtor can help you with this if you need it.
  • If you decide it’s time to be a homeowner, talk with a financial planner or a Realtor if you haven’t already. They can help you determine whether you’ll qualify for a mortgage and help you figure out what you can afford. If you can’t qualify, don’t lose hope. Find out what needs to be fixed and spend the time you need fixing your credit, waiting until you’re earning more or doing what you have to do. Home ownership isn’t something to be rushed, and it simply isn’t for everyone. You may never recover if you get in over your head.
  • If you can qualify and you know what you can afford, shop around for a mortgage. Some experts suggest talking to three banks and three mortgage brokers. A Realtor can help you find banks and brokers with good programs. Look at interest rates, closing fees, other costs and programs. An adjustable might be right for you, but be careful and review all your options.
  • Once you’ve prequalified, work with a Realtor to find the home that’s closest to your dreams. You need to move carefully, but quickly.
  • A warning: Once you qualify for a mortgage, don’t do anything that will change your status. The most common mistake is to take on new debt. Avoid new credit cards, lines of credit, major purchases and be sure your bills are paid on time.

It is truly a great time to become a homeowner, but do it the right way. Plan it carefully and find a home where you and your family can comfortably grow, create memories and become part of a community while enjoying the financial and taxation benefits of home ownership. Give us a call or shoot us an email today and we can show you why homeownership is such an integral part of our American Dream.

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Short Sale Informational Seminar - Chester, NJ

11-06-11
Kelly Holmquist

Short Sale Seminar Information for November 14th, 7pm at the Lamplighter Restaurant in Chester. Please pass it along to anyone you know who may be in this situation. Please RSVP via the information on the photo. Thanks very much in advance.
Kelly
www.TheHolmquistTeam.net

Short Sale Seminar Invitation

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Short Sales - An alternative to foreclosure

11-04-11
Kelly Holmquist

People sell their homes for a variety of reasons. Among the toughest situations is the person who is behind or struggling with payments because of job loss, divorce or other problems. While the popular wisdom is that people can just abandon a home, walking away will lead to a foreclosure that sparks devastating long- and short-term financial, tax and legal implications for the former property owner.

An experienced seller’s agent can help you avoid such a desperate move. Among the options is a “short sale.” In a short sale, the bank allows you to sell your home for less than what you owe. The bank forgives the difference and you walk away with a smaller impact on your credit than you would with a foreclosure and nobody is chasing you for damages.

When I first started encountering short sales, the banks were the biggest problem. Bankers had no idea how to handle short-sales. Files were missing, banks had no system for tracking documents and everything was hand-written. It was a mess and nothing was consistent. In those early days, I had one bank approve a $250,000 loss in three weeks and another take more than a year to decide on a loss of $50,000.

Things have gotten better and banks now have standardized the process. A short sale can happen in 90 days from application to closing. These transactions, however, aren’t the norm and require an experienced attorney and Realtor to negotiate with the lenders. You also can’t get away with accepting any offer. Banks bring in an appraiser to make sure the home sells within an acceptable range of market value.

Even the federal government has gotten into the short-sale act. The Home Affordable Modification Program (HAFA) was created last year to help homeowners who apply for but do not qualify for a loan modification. The rules are:

  • The property is your principal residence;
  • The mortgage on it was originated before Jan. 1, 2009;
  • The mortgage is owned or guaranteed by Fannie Mae or Freddie Mac;
  • You are delinquent in your payments or default is foreseeable;
  • You can demonstrate hardship;
  • Your total monthly housing payment exceeds 31 percent of your gross income;
  • The unpaid principal does not exceed $729,750.

Talk to an experienced real estate agent about selling your home as a short sale. It’s not the best way to sell a home, but it’s better than a foreclosure.

By the way, the government considers any debt you don’t pay as income. Expect a 1099 IRS form from the bank for the amount of the shortfall that is forgiven. More information about that is here.

Buyers know there still are bargains to be found among short sales. They need flexibility because there’s no guaranteed closing date and they must be willing to accept some up-front expenses such as attorney’s fees, home inspections and so forth. Buyers need to make a reasonable offer because the banks are using appraisers now.

The good news is that the majority of homes have been well maintained and there aren’t many surprises. That’s because, unlike a foreclosure, the seller usually occupies the property until the closing and agrees to maintain it.

As with the seller, buyers need an experienced real estate agent to properly represent them. And the HAFA rules, while mostly aimed at the seller, also impact the buyer:

  • Buyers must present documentation of funds or a pre-approval letter from a lender. The seller will need to present this to his or her lender within three days of receiving the offer.
  • Lenders must approve or deny the offer for the home within 10 business days.
  • Settlement must take place within a reasonable period, but the lender cannot require a closing earlier than 45 days from the date of the sales contract unless the homeowner agrees.
  • If you buy property under this act, you can’t sell it again for 90 days.
  • Sellers can’t sell the property to a relative or anyone else with whom they have a close personal or business relationship.

You have nothing to gain by paying a third party to supply you with lists of foreclosures or so-called pre-foreclosures. Homes that are foreclosed and homes where the seller wants to sell short will be listed on the Multiple Listing Service when they are available. Your agent will watch for them and alert you.

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Too few homes available?? In this market?? In Chester and Long Valley??

11-02-11
Kelly Holmquist

Although we keep hearing about the glut of homes on the market, there is actually a shortage of homes available in Northern NJ. That means that if you’ve been thinking of selling, this is a good time to list your home.

There were about 100 homes listed but unsold in the Chesters as of the end of September. At the end of June, that number was 211. In Mount Olive, there 28 homes listed but unsold in March. That number slipped to 20 in August and down to 18 in September. Across Morris County, there were 439 homes available at the end of May. That number is now down to about 317.

A recent report says the pace of home sales in New Jersey was stabilizing in September, with the rate of sales dropping back to last year’s pace after a brief increase. This same report says that the number of unsold homes fell for the fourth consecutive month in September.

The question, of course, is why is this happening and how does is it impact you if you’re thinking about listing your home. The first answer is typically murky: Most experts cite the low point of the selling season and that people have taken their homes off the market or chosen not to list them until they can get more for them.

But for those thinking of listing their homes, it means less competition in a market where it’s tough to sell homes.

OK, enough confusing statistics: What do you need to know for your decision whether to list or not list?

First: If you need to sell your home because your family, financial or job situation has changed, there is no bad time. Prices are not going to rise soon, but interest rates and the number of houses on the market will.

Second: While supply and demand usually impact price, it isn’t working this time because consumer confidence, employment numbers and other factors. But basic math tells you that the chance of your home being chosen from among three homes is better than your chances of being chosen from among six homes.

Third: Your circumstances are as unique as you are. You’re Realtor or financial advisor is in the best position to counsel you about listing your home, the price at which to list it and what expectations you should reasonably have about sales success.

One more thing to think about: Some Realtors specialize in helping people buy homes, others specialize in helping people sell homes. You should make sure you’re working with a seller’s broker.

Finally, this note: If you’re thinking about selling your home because your mortgage is swamping you and you really don’t want to have the bank foreclose on you, there are lots of options. One of those is a short sale, where the bank agrees to take less for the home than you owe them. Mark you calendar for 7 p.m. Nov. 14, when a panel of experts will discuss short sales as an alternative to foreclosure. Visist www.HelpForMyHouse.info for details.

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Change in Home-Selling Seasons Means A Change In Tactics

10-27-11
Kelly Holmquist

This is the time of year when people are thinking about starting school and getting ready for the holidays. But the holiday season also marks the end of the home-buying season. Traditionally, that season runs from around the beginning of March until the end of October. These, however, are not traditional times, and you should talk with your Realtor about how to proceed.

Some buyers may decide that the kids can share a room for another year, or that they can drive an extra 15 or 20 minutes to work until spring. You’ll probably lose those buyers. On the other hand, the buyer who is more highly motivated will still be in the market and may want to be settled by the time the snow flies. We’re talking ‘quality’ instead of ‘quantity’ after October.

A discussion with a Realtor will help you decide whether to take a break from the market, adjust pricing, change marketing strategy or do nothing. Your case will be different from everyone else’s.

If you’re a buyer, you also should discuss your house-hunting strategy with your real estate counselor. It’s possible to find some good buys off season, but that perfect home you saw might come off the market if you wait. And don’t forget the standard rules of house-hunting: He who hesitates might lose if someone makes an offer first.

There’s an old saying among real estate people: There is no bad time to buy the right home. That remains very true. The changing season requires some discussion about strategy, but it’s not a time to abandon hope, slash prices or shop for fire sales. It’s a time for a realistic assessment of where you are in the market and what it will take get you where you want to be.

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